The terms ‘Bai’ and ‘Muajjal’   have been derived from Arabic words ‘ﻊﻴﺒ’ and   ‘ﻝﺟﺍ’. The word ‘ﻊﻴﺒ’ means purchase and sale and the word ‘ﻝﺟﺍ’ means a fixed time or a fixed period.

"Bai-Muajjal" may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer.

In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.

Thus it is an Investment sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.